Wells Fargo & Co to pay $3bn in fraud case

Wells Fargo & Co has reportedly agreed to pay $3bn as a settlement after a criminal and civil investigation into fraudulent sales practices.

The financial punishment will include a $500m civil penalty which will be distributed by the US Securities and Exchange Commission (SEC) to investors, according to a report from Markets Insider.

The $3bn fine will be paid to the US Justice Department and the SEC and will also put Wells Fargo into a three-year deferred prosecution agreement to rectify the investigation into false bank records and identify theft, the article said.

To avoid prosecution, the bank must keep to the terms stipulated in the agreement, which includes cooperating with future investigations.

In line with the settlement, Wells Fargo admitted that during 2002 and 2016 it pressured employees to meet extreme sales goals which led to thousands of employees to give millions of customers accounts and products under false pretences or devoid of consent. In certain cases, this included making fake records or misusing customer identities, the article claims.

Finally, the bank stated it collected millions of dollars in fees and interest which it was not entitled, it damaged credit ratings of customers and illegally used customer personal data without consent.

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